12 GRC Professional • Autumn 2013
HONG
KONG
PROVISIONS ARE BEING GAZETTED, PAVING THE
way for various components of the bill to come into effect in
the next year with the appointment of a commissioner and a
13-member commission having been announced, effective
from 1 May 2013.
Provisions for a Competition Tribunal, which will enforce
the legislation, will be introduced by 1 August.
"Hong Kong's business community never believed there
would be a big bang approach to this," says John Hickin, a
partner at law firm Mayer Brown JSM in Hong Kong.
"When the Ordinance was passed last summer it was
generally accepted that a ny steps towa rds enforcement would
not happen until 2014, so this is a transitional year," he says.
The Ordinance will bring Hong Kong up to scratch with
anti-competitive or anti-trust conduct laws in the rest of the
developed world. It has been a long time coming. The fir st
round of public consultation started in 2006, but it gathered
pace in the wake of the global financial crisis (GFC).
The thrust of the Ordinance deals with anti-competitive
agreements between competitors and seeks to ensure fair
competition by preventing a compa ny with market power
from abusing that position to the detriment of competition in
the marketplace.
Like other competition laws, the Ordinance will ban
practices such as the formation of cartels, bid rigging,
predatory pricing and refusing to deal (price fixing).
"In common with what is happening in many jurisdictions,
we are seeing increasingly more regulations and vigilance by
regulators," says Hickin.
As his law firm points out, the new legislation affects
ever ybody who makes price-related
decisions, does contractual negotiations,
structures joint ventures, participates in
trade associations, communicates with
competitor s, imposes exclusive obligations
on trading partners as well as many other
responsibilities.
WTO commitments
What really spurred Hong Kong on,
says Hickin, was China's adoption of anti-
monopoly laws in 2008 as part of its World
Trade Organisation com mitments.
Regulatory oversight has also been
introduced and updated right across Hong
Kong's finance sector in the past decade.
The commission will be a freestanding
entity outside the government.
Serious anti-competitive activities will
be prosecuted but activities considered
less serious, such as restrictions on
advertising, will receive a warning notice
first time round.
"In common with what is happening
in many jurisdictions, we are seeing
increasingly more regulations and
vigilance by regulators," says Hickin.
The introduction of the Competition
Ordinance has not been without its critics,
especially small to medium businesses
In common
with what is
happening
in many
jurisdictions,
we are seeing
increasingly
more regulations
and vigilance by
regulators.
Hong Kong rolls out
Competition Ordinance
Hong Kong has begun rolling out its Competition Ordinance
after unanimously passing its Competition Bill into law in the
Legislative Council last year.
BY DENISE MCNA BB